27.03.2014 | 13:19 Department of Information and Communication of the Secretariat of the CMU

The Cabinet
of Minister has approved a decision in the current year not to introduce taxes on
banking deposits, however it stands for introduction of
a progressive scale on incomes of the citizens.

The Prime
Minister Arsenii Yatseniuk informed in Parliament on Thursday, March 27, while
submitting the draft laws on preventing financial catastrophe and creating
prerequisites for the economic growth in Ukraine, on making changes to the
State Budget for 2014.

He stressed
the Government viewed as necessary to impose “a tax on wealth, in fact”. Among
the variants of taxation considered by the Government has been taxes levied on
deposit interest rates: “Not just the deposits proper but exceptionally on
deposit interests”.

The
Head of Government stressed passive income is taxed in all the EU member
countries. To compare Ukraine “a bank pays a passive income on 25% annual
rates and none pays any taxes from this income”.

“Moreover,
if a deposit interest rate is 25%, a real rate in the economy will be 40%, as the bank must earn on
something. It is inadmissible,” the Head of Government added.

At the
same time, with the view to the current conditions the Government has approved
a decision in the current year not to introduce taxation of incomes from bank
deposits, Arsenii Yatseniuk informed.

However,
the Cabinet of Ministers suggests to introduce a progressive scale for the
incomes of the citizens: “The one who earns over UAH 300 thousand will pay
tax worth 20%, while the one who earns over UAH 500 thousand- 25% respectively”.

Herefrom,
taxation will be imposed towards 300 thousand citizens who have financing
resource which makes up 60% of overall assets of Ukraine, A. Yatseniuk emphasized.

“1.7% rich Ukrainians must pay taxes so that 98%
Ukrainians could feel the time of social justice has come,” he declared.

Apart from
that, Arsenii Yatseniuk informed that the Government suggests raising of
excise tax rates for alcohol and tobacco goods. “I consider it won’t affect
creating of working places, while the scale of beer drinking in the country
is over-the-top, the amount of smoked cigarettes and actually destroyed
health of Ukrainians as a result is incredible”.

He explained
after raising of the excise tax rates a bottle of
beer, that is now UAH 8, will cost UAH 8.50, a package of cigarettes will up
from UAH 15 to 16, an average price of a bottle of vodka will grow from UAH
32 to UAH 35.

Moreover,
the Head of Government accentuated the Cabinet of Ministers had adopted a
decision in the current year to avoid transition of the agro-industrial
complex to the general system of VAT taxation.

At the
same time, the Government accounting for the proposal of the European
Business Association, American Chamber of Commerce and a set of entrepreneur associations
is planning to introduce a value added tax on grain export.

He reminded
there had been “a bare earning” on this market: “Grain was purchased from
villagers, let it through their own shell company, where 20% were inflated
and didn’t flow into the budget, and afterwards through a large trader it was
sent to the customs, declared and exported, as a result additional 20% was
received from the budget”.

According
to Arsenii Yatseniuk, the funds didn’t flow to the pageants but to the
pockets of an exporting company: “Hence we suggest introducing VAT for grain
export. We shouldn’t fool pageants”.